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Price Signal Summary - Bull Flag In Gilts Confirmed

OUTLOOK
  • In the FI space, Bund futures reversed course yesterday. The contract traded sharply higher yesterday and maintains a firmer tone. Price has traded through the 20- and 50-day EMAs and breached short-term resistance at 131.86, the May 7 high. This highlights a reversal and signals scope for a climb towards 132.89, 38.2% of the Dec 27 - Apr 25 bear cycle. Initial key support has been defined at 130.24, the May 14 low.
  • Gilt futures traded higher Wednesday, confirming the end to the recent pause in the bull cycle, which appeared to be a bull flag formation. The breach of resistance at 98.29, the May 10 high, confirms the flag and highlights a resumption of the recovery that started Apr 25. This signals scope for a climb towards 99.19, 76.4% of the Mar 12 - Apr 25 bear leg. Initial firm support has been defined at 97.23, the May 14 low.

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